Special Procedure for Transition – J&K and Ladakh GST Compliance

Notification No.: 62/2019 – Central Tax
Date of Notification: 26th November 2019
Relevant Sections and Rules:

• Central GST Act, 2017:
  • Section 148 – Special procedure for certain registered persons
  • Section 2(106) – Definition of tax period
  • Section 24(i) – Compulsory registration for inter-State supply
  • Section 39 – Return filing (GSTR-3B)
• CGST Rules, 2017:
  • Rule 61 – FORM GSTR-3B (Credit transfer mechanism)
• Integrated GST Act: Not directly applicable

Summary of Notification

Special Procedure for Transition from State of J&K to UTs (J&K and Ladakh):
The Central Government, under Section 148, notified a special procedure for taxpayers whose principal place of business was in the erstwhile State of Jammu and Kashmir till 30th October 2019 and lies in the Union Territory of J&K or UT of Ladakh from 31st October 2019 onward. This procedure is valid till 31st December 2019 (transition date).

1. Split of Tax Period for October and November 2019:
   For GST purposes, tax periods are redefined as:

• October 2019: 1st to 30th October
• November 2019: 31st October to 30th November

Returns filed under Section 39 (GSTR-3B) shall reflect this classification.

2. Payment of Correct Tax Type Irrespective of Invoice Details:
   Even if invoices were raised using incorrect tax types post-reorganization, taxpayers must pay the correct applicable tax in their GSTR-3B returns till the transition date.
3. Transfer of ITC Between Old GSTIN (J&K) and New GSTIN (J&K or Ladakh):
   Taxpayers shifting from the State of J&K GSTIN to new UT-based GSTINs can transfer ITC as follows:

• Must inform jurisdictional tax officers within 1 month of new registration.
• Transfer of ITC shall be in proportion to turnover in respective UTs.
• The transferor GSTIN shall debit the ITC in Table 4B(2) of GSTR-3B.
• The transferee GSTIN shall credit the same in Table 4A(5) of GSTR-3B.

4. Treatment of State Tax Credit in Ladakh:
   State tax balances in electronic credit ledger of taxpayers shifting to UT of Ladakh will now be treated as Union Territory Tax Credit.
5. Inter-State Supply between J&K and Ladakh – Registration Exemption:
   From 31st October to 31st December 2019, the compulsory registration requirement under Section 24(i) will not apply to persons making inter-State supplies between Jammu & Kashmir and Ladakh.

Source: Notification No.: 62/2019 – Central Tax